Customer Satisfaction in Banks in The Philippines

Customer Satisfaction of Bank Services in the Philippines
Review of Related Literature
Understanding customers needs and providing them quality, effective and efficient service are
critical issues that most industries have given the most importance. The financial industry is no
exception. Banks, being an important institution in the financial sector, are expected to
provide the best customer service and the most updated technological schemes to gain more
competitive advantages. Study shows that customer satisfaction proved to be significant with
the predictive effects of convenience, economic value, and quality of service, while perceived
service quality mediates between the relationship of convenience and customer satisfaction
(de Souza,. A., et al., 2020).
The rapid speed of technological change in banking has altered not only the way customers
are served but also the way banks run their businesses on the back end, causing a shift in the
marketing function that banks perform. As a result of this transformation, the relationships
that exist between traditional advertising firms and marketers have changed (Loftin, 2020).
Consumers now have more power as a result of technology because they have access to more
information and more ways to shop. The use of social media opens up new doors for
informing, retaining, and alienating clients.
The implementation of technology in financial services paved the way for banking
organizations to transition away from the conventional method of banking and toward
electronic banking, which is characterized by increased productivity and decreased overhead
costs. According to a survey that was carried out by the Bangko Sentral ng Pilipinas (2017),
even though there is a significant amount of internet usage and awareness of online payment
methods amongst Filipinos, almost half of those with bank accounts and using the internet
remain undecided about electronic transactions due to various behavioral factors. Thus, a
relative study regarding efficiency, fulfilment, system availability, and privacy as factors
affecting customer satisfaction finds that, upon analysis of the significant aspects, or
dimensions, of service quality that cause online banking to have an impact on customer
satisfaction, it is determined that efficiency and fulfilment have the greatest influence on
customers' perceptions of the value of the service and their willingness to remain loyal to the
brand (Mendoza, M. C. O., et al. 2020).
Customer satisfaction is very important since customers can sell the banks' services and
products, thereby giving benefits to the bank without extra cost by enhancing profitability as
long as customers continue to enjoy the services. Thus, it was found out that keeping current
customers is cheaper than acquiring new ones (H. Hamad, 2018). Maintaining satisfied
customers is important since negative customer perceptions can destroy the business, leading
to lost revenue, market share, and reputation, making it necessary to measure the perceptions
of customers towards a certain product or service.
With the current globalization and continuous technological advancement, it is necessary to
understand the attributes that define service quality in banks and that strongly affect customer
satisfaction, patronage, retention, and loyalty. Earlier studies on service quality proved that
offering quality service has a significant impact on overall customer satisfaction (Sharecho,
N. S., & Raghava, D.).
On the other hand, there are also other considerations affecting service quality that are rooted
in the TOE framework that adopts and implements technological innovation in a
technological context, an organizational context, and an environmental context that need to
be reviewed in relation to Awa, Ojiabo, and Orokor (2017). Reiterating that the TOE
framework is for organizational level analysis, it also gives attention to how the business
leaders and managers handle the business. Organizational context describes the setting in
which an integrated initiative is implemented, including all other outside organizational

factors such as governance structures, leadership approach, and organizational culture. A
leadership approach can be associated with factors related to the organization’s senior
management team or designated leaders, which have a significant effect on delivering service
quality in the financial sector.
Leadership approach and style through the different processes in connection with the roles of
innovation behavior and job can be associated with factors influencing service quality (Huo-
Tsan Chang et al., 2021).
Other factors affecting customer satisfaction are identified as being customer perceptions of
quality, value, and service. Understanding the detrimental changes in business performance
and proactively finding ways to limit their effect is one way of maintaining customer
satisfaction. Listening to customers' feedback—the information being provided by customers
about how they feel about the product or service—is an important way to gauge how your
customers perceive your business and help marketing teams discover where there is room for
improvement. However, there is a dearth of literature on post-adoption and service quality
assessment of different banking applications and services. Thus, research on these topics
should always be considered.
Reference
Awa, Hart O.; Ojiabo, Ojiabo Ukoha; Orokor, Longlife E. (2017). "Integrated technology-
organization-environment (T-O-E) taxonomies for technology adoption". Journal of
Enterprise Information Management. 30 (6): 893–921. doi:10.1108/JEIM-03-2016-0079.
de Souza, Á. A., Damacena, C., Araújo, C. F., & Seibt, N. G. (2020, October). The Influence
of Customer Participation and Convenience on Customer Satisfaction: A multiple mediation.
In CLAV 2020.
HAMAD, H. (2018). Customer satisfaction in banking sector: The case in North Iraq, City Of
Erbil.
Huo-Tsan Chang, Yu-Jia Chou, Min-Chih Miao & Jia-Wen Liou (2021) The effects of
leadership style on service quality: enrichment or depletion of innovation behaviour and job
standardisation, Total Quality Management & Business Excellence, 32:5-6, 676-692, DOI:
10.1080/14783363.2019.1626708
Loftin, S. (2020, July 20). The rising role of marketing in banking. ABA Banking Journal.
Retrieved December 11, 2022, from https://bankingjournal.aba.com/2020/06/the-rising-role-
of-marketing-in-banking/
Mendoza, M. C. O., Santos, R. R. C., & Magdaraog, J. E. H. (2020, April). Assessment of e-

service quality dimensions and its influence on customer satisfaction: A study on the online
banking services in the Philippines. In 2020 IEEE 7th International Conference on Industrial
Engineering and Applications (ICIEA) (pp. 1076-1081). IEEE.
Sharecho, N. S., & Raghava, D. Effect of Service Quality on Customer Satisfaction in
Commercial Bank of Ethiopia, Branches in Wolaita Sodo.

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Customer Satisfaction of Bank Services in the Philippines

Review of Related Literature

(de Souza,. A., et al., 2020).

informing, retaining, and alienating clients.

electronic banking, which is characterized by increased productivity and decreased overhead

brand (Mendoza, M. C. O., et al. 2020).

of customers towards a certain product or service.

With the current globalization and continuous technological advancement, it is necessary to

N. S., & Raghava, D.).

in the TOE framework that adopts and implements technological innovation in a

technological context, an organizational context, and an environmental context that need to

which an integrated initiative is implemented, including all other outside organizational

quality in the financial sector.

Tsan Chang et al., 2021).

satisfaction. Listening to customers' feedback—the information being provided by customers

improvement. However, there is a dearth of literature on post-adoption and service quality

should always be considered.

Mendoza, M. C. O., Santos, R. R. C., & Magdaraog, J. E. H. (2020, April). Assessment of e-

Sharecho, N. S., & Raghava, D. Effect of Service Quality on Customer Satisfaction in

Commercial Bank of Ethiopia, Branches in Wolaita Sodo.

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